Investing.com - Lululemon Athletica (NASDAQ:LULU) on Thursday pulled its annual guidance and reported fourth-quarter earnings and revenue that topped expectations thanks to growing margins and a strong performance in its direct-to-consumer business.
"Due to the impact that COVID-19 is having across the globe, and the rapid and continuous developments, we are not providing guidance for fiscal 2020 at this time. We will provide additional updates as the situation warrants," Lululemon said.
Lululemon Athletica shares lost 1.8% in after-hours trade following the report.
Lululemon Athletica announced earnings per share of $2.28 on revenue of $1.40 billion. Analysts polled by Investing.com anticipated EPS of $2.25 on revenue of $1.38 billion. That compares to EPS of $1.85 on revenue of $1.17 billion in the same period a year before. Lululemon had reported EPS of $0.96 on revenue of $916.14 million in the previous quarter.
The beat on the bottom line was supported by a 70-basis-point increase in gross margin to 55.9% year on year and growing comparable sales.
Comparable-store sales increased 9% and direct-to-consumer net revenue jumped 41%.
The better-than-expected performance comes as the Covid-19 pandemic has forced the retailer to shutter is stores in the U.S. and abroad. But there is a glimmer of hope in China, where the company is on the path to resume operations after the country went into lockdown for several weeks to contain the outbreak.
"In February 2020, we temporarily closed all of our retail locations in Mainland China. All but one of these locations have since reopened. In March 2020, we temporarily closed all of our retail locations in North America, Europe, Malaysia, New Zealand, and we temporarily closed our distribution center in Sumner, WA. These locations currently remain closed," Luluemon said.
Lululemon Athletica shares are down 13.32% from the beginning of the year, still down 24.57% from its 52-week high of $266.20 set on February 20. They are underperforming the Nasdaq 100 which is down 10.28% year to date.
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